Layoffs: How some companies come away looking better, stronger
March 27, 2009 by Jim GiulianoPosted in: Behavior, Communication, Management, Special Report, Terminations
Few HR managers or employers in general see a layoff or round of terminations as a chance to polish the company’s image. They may be missing an opportunity to show the employer’s best side in the worst of times.
The downsides of a layoff are obvious to anyone who’s ever presided over the process:
- lawsuits
- a reduction in productivity, at least in the beginning
- bitter ex-employees and low morale among remaining employees
- bad public relations
- shaky loyalty from concerned customers
So, is it really possible to conduct a layoff and end up looking better — or at least as strong as you were pre-layoff? That depends on how the layoff is handled.
The message
If the decision has been made to reduce the workforce, you should create a document that details the reasons for the decision and the goals the company hopes to achieve. The message should be in clear, concise language and in no way appear to be a cover-up or just some official company line.
What’s the point of the document? For one, managers need to understand the reasons for the layoff — besides just “to cut costs” – in order to support it. That’s especially true for first-line supervisors who often get the bulk of questions, phone calls and complaints. The management team must be able to respond consistently with accurate, consistent information — to employees and to customers who get wind of the layoff.
Few people are going to like the decision, but they’ll accept it better and think more of the company if the reasons given are clear, honest and consistent.
The meetings
Informing laid-off employees of the decision is always one of the toughest parts of the process. Most experts suggest you meet with affected employees individually and inform them of their selection in private meetings. Practice and rehearse what you’re going to say — not so that it sounds staged, but rather so you’re sure you get the words just right.
If individual meetings are impossible due to large numbers, consider conducting meetings by department, shift or unit. That way affected employees are surrounded by familiar faces and not by strangers.
Be brief, consistent and direct. Explain how and why the job was eliminated and specify whether the layoff is permanent or temporary. Outline any recall or rehire rights, available severance benefits, health insurance conversion rights, termination payments and transitional services, if available.
Because employees will be shocked and upset during these meetings, their ability to absorb the information may be limited. Be sure to provide all relevant information in writing and provide the name and contact information of individuals — probably in HR — who will be available to answer questions later.
Carefully select the location and time of the announcement and meetings. If possible, choose a segregated section of the building, preferably an area with a direct exit, so affected employees do not have to pass by their work area or large numbers of people after receiving the bad news. By allowing employees to maintain their dignity and, to the extent possible, their privacy, you can minimize the inevitable negative feelings and leave those employees with the impression that the company still cares about them and their feelings.
Additionally, consider having employee assistance professionals on site on the day of the announcement or available at a specific time and location later in the day or in the days following.
The future
At this time, perhaps more than ever, your remaining employees need attention. You’re going to count on them get the business through the difficult times and help meet the goals hoped to be achieved by the reduction. This is the time for management at all levels to be visible and vocal. Keep employees updated about the financial condition of the company and seek their input for other cost-cutting measures. Look for low-cost ways to recognize hard work and commitment.
There is no way to fully protect a company from lawsuits or hostile reactions following layoffs, but treating the affected and remaining employees with sensitivity and compassion will go a long way to minimizing the risk.
A note about lawsuit risk
Some suggest that to protect against lawsuits, any layoff list should reflect the overall makeup of your workforce. For instance, if your workforce is 40% women, your layoff list should consist of no more than 40% women.
But just about everyone in the real world knows that’s not practical. Most employers sit down and evaluate the list according to needs and employees’ skills and seniority, and then let the chips fall where they may.
What you should do: Take a look at the final list and see if certain groups are overrepresented or underrepresented. If any red flags pop up, that doesn’t necessarily mean you’re going to change the list in some attempt to avoid a bias suit. What it does mean is that you’re getting a signal to double-check all the relevant documentation and reasons for the selection of each employee, in case there ever is a challenge to the selections.
March 31st, 2009 at 9:17 am
This is very sage advice. Unfortunately, those who are in a position to implement such things are not likely to read this article. Also unfortunately, not many HR managers are allowed enough input into such communications, and if input is allowed, it is often after decisions have been made, and we have spent many hours trying to dispel rumors and keep moral from going deeper into the toilet. I have said repeatedly to senior management that anyone having conversations regarding layoffs should have a script – this is a tense situation, often emotional for those being let go. Managers need to make sure they say the right things, and don’t stray from what they must say. They typically should not say what they ‘want’ to say to make the employee feel better.
I had a manager send an email to an external colleague after he had laid off two field employees. Though he was trying to help the laid off workers find a job, in his email (I was copied), he actually mentioned the ethnicity of one of the guys! I was horrified, though I understood his motive (he was trying to indicate that one of the workers was bilingual). Much training is needed on how to handle such things as layoffs; but many senior execs (who rarely actually do the ‘dirty deed’ don’t see the need for training.
March 31st, 2009 at 1:57 pm
To Dallas HR
You know your info. You are right, very seldom are we notified for input before the layoffs. However, I do recall this last round that we did, they asked department heads for opinions, but not HR.
April 1st, 2009 at 9:54 am
We have a few employees currently on lay-off. We are a small company (49 employees total at this time). Plant supervisor is hesitant to call 2 of these people back for various reasons (performance, attitude, attendance). We have documentation of warnings both verbal and written for these infractions for one employee. The other employee has a disability and we are streamlining our processes cross-training employees and supervisor feels he cannot perform all functions necessary. We made reasonable accomodations for him in the past, but with the new procedures in the plant the supervisor does not think he will be able to perform these tasks. Are we obligated to call these two back if position is open now? Or are we setting ourselves up for possible problems?
April 1st, 2009 at 1:54 pm
That can be a bit tricky. For the one with the documented performance issues, hindsight makes me wonder if he or she should have been dismissed for cause… Layoffs are frequently used to weed out low or troublesome performers. Some things to consider: was either ee told in writing that they would be recalled when conditions improved? Do you have a company policy regarding furloughed employees? At any rate, I believe the low performer should be brought back on a documented probationary or conditional basis, with his/her full knowledge, and this should be discussed with the ee prior to re-starting. As for the ee with the disability, is there documentation that reasonable accommodations have been made in the past? If so, that would definitely be in your favor. However, I would say to bring him back and monitor his performance to see if he/she can actually perform under the new processes, rather than assuming he/sh can not. Better safe than sorry. For both employees, be careful. And best wishes!
April 1st, 2009 at 2:07 pm
Sorry guys but if you are doing your position/company/profession any good you need to be right in the mix and be the first person the ‘execs’ go to and discuss a lay-off.
You are supposed to be a business partner in your company and give guidance so procedures like layoffs are completed properly. If you are not, either you are not representing the HR professional positively or your company has no idea of the value HR.
And yes, this article is excellent – maybe you should copy this to the ‘execs’ and give them worthwhile information, show them how useful you can be….
April 1st, 2009 at 3:04 pm
EB, what you say is absolutely correct. But it is much easier said than done. Do you actually think I have not been fighting for my entire tenure as HR director to be included in the strategic planning for this company? I had finally gotten buy-in by the previous management, and when that management changed, so did my strategic role. I think I speak for ALL HR professionals when I say that we try with everything within our power to ensure that we are indeed strategic partners, and that we make every attempt to ernestly represent the HR profession with dignity, professionalism, vision, and respect. HOWEVER, if senior management has a different mindset, HR is often considered to be a ‘necessary evil’ to some senior executives, and this is more often than not by design – through no fault or desire of the HR professional. You are likely asking why I have stayed. It was much worse prior to my start, as the employees had NO HR department at all. And unless you have an opening for HR director at your company and can guarantee me a job, quitting is not an option for me. I’m glad for you, though, that your management sees the importance of including HR not just in the onboarding and exiting processes, but in the strategic planning as well.